Published on Digiday
Cryptocurrency brands have begun to slowly increase their marketing activity in recent months.
But the level of spending from the sector is still far off the highs seen in 2022 when big-name exchanges shelled out for Super Bowl campaigns starring major celebrities.
Faced with a publicity washback from the FTX fraud trials, which concluded in November, and a “crypto winter” between 2021 and the end of 2023, most crypto marketers eased off on advertising activity last year. With the price of Bitcoin and ether rising (if inconsistently) once more, those same marketers are now considering how to handle the next potential boom period.
In the first six months of 2024, Coinbase has quietly increased global advertising spending amid a sector-wide effort to change public perceptions of the technology. In the first quarter of this year, the exchange invested $99 million in marketing and advertising, up $35 million from the same period in 2023.
But that’s less than half of what the company laid down in Q1 of 2022, when it spent $200 million on advertising (and $510 million across the entire year). And according to Magna, the media investment and intelligence unit of IPG Mediabrands, crypto ad spend in the U.S. totaled just $40 million in the first half of 2024, down from $160 million in H1 2022.
In part, that decline reflects the absence of high-spending FTX, the company led by Sam Bankman-Fried, as well as other crypto brands that went bankrupt in 2022. Though the November fraud conviction of Bankman-Fried and the fall into bankruptcy of what had been the second-largest crypto exchange in the world, damaged public perceptions of the business at large, CMOs in the sector told Digiday it also represented an chance to change the narrative.
“I think it would be kind of foolish to assume that didn’t color some people’s perspectives. Frankly, I also think it’s been a real opportunity for us to double down and communicate our differentiated value proposition,” said Kate Rouch, chief marketing officer at Coinbase.
Spring through early summer, the brand launched a campaign touting its ability to help consumers get a fairer shake from their financial providers. “This commercial isn’t about pizza” represented a $15 million investment, including media and production, a Coinbase spokesperson confirmed.
Even without that factor holding back crypto ad investments, Luke Stillman, evp market insights, demand and strategic innovation at Magna, told Digiday that crypto advertising spend was unlikely to “match the exuberant levels of 2022” in the near future.
The previous surge of crypto ad spend followed 2021’s historic highs for the cryptocurrencies – and ended with the market’s crash the next year. With crypto prices now on the rise once more (the price of bitcoin in Q1 of 2024 was higher than it was in 2021), exchange brands say they’re looking to ramp up activity in the near future.
Stillman said in an email that “the recent increase in cryptocurrency prices is expected to boost ad budgets in the second half of 2024 and beyond. This will first lead to more investment in social media and digital video advertising before brands expand their efforts to other channels [such as television] (so long as crypto prices remain strong).”
Until cryptocurrency prices begin to rise at a stable rate, it’s unlikely crypto brands are going to unleash huge media budgets as in previous years. “We want to take advantage of market conditions that allow us to spend more like any company would,” said Rouch.
Marc Vanlerberghe, the recently appointed CMO of Algorand, a non-profit that promotes the use of cryptocurrency and blockchain technologies, told Digiday that a coming “crypto spring” would provide a major window for the sector.
“Coming out of this crypto winter and going into crypto spring and potentially summer, I think that there is a really big opportunity to get the message out about the advantages of blockchains,” he said.
When these companies do decide to begin increasing spending, they’re unlikely to use the same channels as in 2022. Crypto advertisers have largely turned away from television spending and towards social and digital video, said Stillman. Sponsorships and commercial partnerships with sports clubs and cultural institutions have also been adopted as part of the crypto marketing toolkit.
Binance, for example, maintains brand partnerships with soccer star Cristiano Ronaldo and influencer Khaby Lame, as well as sponsoring soccer teams S.S. Lazio, Santos FC and Porto FC and the Alpine F1 team.
“We see sports and entertainment fans as a way to grow mass adoption, to grow awareness and credibility,” said Sarah Dale, head of global brand partnerships and entertainment for the exchange. “It helps educate people, inform people, to bring them into the ecosystem so that they can be part of this journey,” she added.
Dale declined to say how much the company spends on its partnerships, or what proportion of its overall marketing budget they represent. She said that as cryptocurrency values rise and consumers look again at the sector, it expects to both add further partnerships and increase its marketing investments.
“We will grow our portfolio,” Dale said.
OKX maintains sponsorship deals with Manchester City FC, the McLaren F1 racing team, and the Tribeca Film Festival. Meanwhile, crypto exchange Kraken has been a sponsor of the Williams F1 team since last year, and this week signed a shirt sleeve sponsorship with La Liga soccer team Atlético de Madrid.
“It’s better to activate partnerships over a long period of time than just simply buying media,” argued Haider Rafique, CMO of OKX. “We don’t want to buy media, we want to be reliant on organic reach.”
Investments in sponsorships aren’t tracked by industry observers like Magna, and often aren’t made public, meaning at least some of the sector’s marketing investments are hidden from view.
Rafique estimated that OKX has spent $100 million on partnerships each year for the last three years. “Now that I’ve deployed $100 million a year on these partnerships over a period of time and learned … I’m more confident that media sucks, and it’s not the best value for your dollars.”
The above-the-line work they are putting into play is also more focused than the campaigns which made up the infamous “crypto bowl” at Super Bowl LVI.
Coinbase, for example, has been running a campaign targeting Mexican consumers inside the U.S., presenting itself as a viable way of transferring cash to family members across the southern border.
“It’s building on a theme of work that we’ve had really for the last couple of years, which is around crypto moving money forward,” said Rouch. The campaign cost Coinbase $2 million, including production and media spend, and ran on Univision’s Spanish-language coverage of the Copa America soccer tournament.
Mayur Gupta, CMO of Kraken, told Digiday that as the price of Bitcoin dropped during the last bear market, some of the new customers it had picked up during the preceding boom period melted away, though he declined to share the firm’s customer turnover rate.
Going forward, he said the company was conducting more consumer research to better understand how to communicate with consumer that might engage with its products for reasons other than “wealth building”.
“When you bring people in for the right reasons, they will stay on with you,” he said. It’s a consistent theme among crypto marketers, who want to attract users and traders that will stick around through market volatility.
“We’re not a get rich quick scheme,” said Rafique.
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